US Dealers’ November reign
Search Driven for for sale
BLACK FRIDAY PUSHES CAR SALES TO HIGH OF US$1.3 MILLION
November used to be a slow month for US car sales. Not any more.
Black Friday promotions — some of which began much earlier — pushed last month’s sales to a 14-year high of $1.3 million (NZ$1.9 million), just short of a record for the month. Sales were up 1.4 per cent from last November, according to Autodata.
General Motors’ sales rose 1.5 per cent, while Toyota and Fiat Chrysler each saw 3 per cent sales gains. Hyundai’s sales jumped 12 per cent, while Nissan’s were up 4 per cent. Ford’s sales were flat. Honda’s sales fell 5 per cent, hurt by lower CR-V sales.
November was a notoriously slow sales month until about five years ago, when car dealers joined other retailers in promoting Black Friday, according to Edmunds analyst Jessica Caldwell.
Now, like Amazon, Wal-Mart and others, dealers start advertising Black Friday deals as early as a month earlier at Halloween.
Jeep offered 0 per cent financing for up to 75 months. GM teased savings of up to 20 per cent of for its Buick, Chevrolet and GMC brands. Hyundai offered an extra $500 on the Sonata sedan between November 20-30.
Ford’s US sales chief Mark LaNeve said sales got progressively stronger in November, and the last day of the month was one of the best this year.
Deals can be dangerous for the auto industry because they cut into profits and lower vehicles’ resale value. Incentives have been creeping upward since 2011. In November, they rose an estimated $172 over last year to $3066 per vehicle, according to the car buying site TrueCar.com.
But Eric Lyman, vice-president for industry insights at TrueCar, says the gradual increase isn’t worrisome.
For one thing, companies are making more profit per vehicle than they used to because they’re selling more expensive SUVs and trucks. The average sale price of a vehicle last month was $32,966, up 1 per cent from the previous month.
Manufacturers are also trying to capture as many sales as they can in the boom years before sales inevitably slow. Rising interest rates, higher gas prices and other factors are all expected to stall auto sales sometime in the next few years.
“It’s kind of like, make hay while the sun shines,” Lyman says.
Sales forecasting firm LMC Automotive says sales are likely to reach a record $17.5 million in 2015.
But for Volkswagen, its emissions-cheating scandal took a serious bite out of the company’s US sales last month.
The German carmaker reports that November US sales fell almost 25 per cent from a year ago.
The VW brand sold just under 24,000 vehicles last month compared with almost 32,000 a year ago.
The US is a relatively small market for the company. The VW brand sold 490,000 vehicles worldwide in October, 5 per cent below a year ago.
VW has admitted that 482,000 2-litre diesel vehicles in the US contained software that turned pollution controls on for government tests and off for real-world driving.